Patrick proposing taxes to soften the blow of state aid cuts to cities and towns

Thursday

Jan 29, 2009 at 12:01 AMJan 29, 2009 at 9:42 AM

As the state gears up for a long debate on the 2010 budget, the budget year that begins July 1, South Shore cities and towns must immediately make tough decisions to address the local aid cuts.

Nancy Reardon

As the state gears up for a long debate on the governor’s proposed fiscal 2010 budget, South Shore cities and towns must make quick, tough decisions to address cuts in state aid to cities and towns.

Braintree Mayor Joseph Sullivan, a former legislator, is to meet with department heads as early as today. His town is losing nearly $700,000 in state aid and must prepare for even steeper cuts in the next fiscal year, starting July 1.

“We have been told to triple that ($700,000) figure for the next fiscal year,” he said.

Sullivan is approaching the budget crisis with the same attitude as many town officials.

“To say that everything is on the table is the proper approach,” he said.

On Wednesday, Gov. Deval Patrick described his emergency recovery plan – which includes details for this month’s $128 million cut in state aid to cities and towns as well as his proposed $27.9 million budget for fiscal 2010 – as a “multi-pronged blueprint” to help the state recover from a fiscal crisis.

It includes new taxes on meals, hotel rooms, alcohol and candyand $816 million in withdrawals from the state’s rainy day fund, and relies heavily on up to $1.2 billion in expected economic stimulus money from the federal government.

For the remainder of the current fiscal year, the governor has proposed $191 million in cuts – including the $128 million to local aid.

Looking ahead to fiscal 2010, Patrick is proposing a $375 million cut to local aid.

In Pembroke, Selectmen Chairwoman Terry Finnegan said the town may be able to absorb the $203,000 reduction in state aid for 2009 without cuts.

“We will probably have to scale back a few things, but not necessarily cut. But everything’s on the table for next year,” she said, adding that for 2010, “We’ve got to prepare for the absolute worst.”

Marshfield Selectman Michael Maresco said his town plans to “crunch the numbers” on Monday.

“We have to be cautiously optimistic,” Maresco said. “It could always be worse.”

That attitude reflects the same message Patrick emphasized during Wednesday’s budget presentation.

“Taken together, these measures are right and necessary steps to get us through tough times,” he said.

Patrick’s plan for fiscal 2010 includes $1.6 billion in cuts and $587 million in new taxes, which include increasing the meals and hotel tax by 1 percentage point.

Those tax proposals would raise $150 million to reduce state aid cuts. An additional 1-cent local-option meal and hotel tax increase would raise $200 million more, he said.

The local tax options would diversify a community’s tax base, which relies on property tax revenues, and soften the effects of state aid cuts, Patrick said.

But many legislators already signaled that they don’t favor passing new taxes.

The Senate and House minority leaders said the governor is rushing to “tax and spend” his way out of the fiscal crisis.

Sen. Robert Hedlund, R-Weymouth, said he’s opposed to reaching for new taxes “right out of the gate.”

“I wouldn’t call it an economic recovery plan when it hits small businesses and impacts working families,” Hedlund said, noting an increased meals tax means “the rich can still afford to eat out.”